Kerby Anderson

In a recent interview, James Lavish (Hedge Fund Investment Manager) explained the economic dilemma facing our leaders. First, he laments that so many in media and the government keep promoting that the economy is doing fine when the average American consumer isn’t doing well. Only the people who own assets are doing well. He has observed how hard it is for so many American to go to the grocery store and put healthy food on the table.

He also observes how much Americans are cutting just to survive. They aren’t going on vacations. Students wonder if they will ever pay off their student loans. And the youngest generation has essentially given up believing they can own a home. But he also points out that because of the Internet and social media, they are more aware of their economic circumstances.

With inflation at 2 percent or now 3 percent, they are being clipped. They feel like the frog boiling in a kettle. He says this has become even more concerning since we have lost a quarter of our purchasing power since 2020.

Here is the economic dilemma. American consumers want lower interest rates. Then they will have lower credit card rates, and lower mortgage rates. But lowering interest rates doesn’t help fight inflation. Meanwhile, the government and the Federal Reserve are trying to make sure they can keep the economy out of recession.

He concludes that the government will have to start printing dollars again. But this solution only postpones the inevitable. As I have mentioned in previous commentaries, Larry Lepard’s book, The Big Print, warns we can’t keep kicking the can down the road, because we are running out of road.

This is the economic dilemma facing our leaders. There are no easy answers this time. We simply can’t continue with a “business as usual” approach anymore.